Skip to main content
  • News
  • Events
  • Blog
  • Search

Natural Resource Governance Institute

  • Topics
    Beneficial ownership
    Economic diversification
    Mandatory payment disclosure
    Revenue sharing
    Civic space
    Energy transition
    Measurement of environmental and social impacts
    Sovereign wealth funds
    Commodity prices
    Gender
    Measurement of governance
    State-owned enterprises
    Contract transparency and monitoring
    Global initiatives
    Open data
    Subnational governance
    Coronavirus
    Legislation and regulation
    Revenue management
    Tax policy and revenue collection
    Corruption
    Licensing and negotiation
  • Approach
    • Stakeholders
      • Civil society actors
      • Government officials
      • Journalists and media
      • Parliaments and political parties
      • Private sector
    • Natural Resource Charter
    • Regional knowledge hubs
  • Countries
    NRGI Priority Countries
    Colombia
    Guinea
    Nigeria
    Tanzania
    Dem. Rep. of Congo
    Mexico
    Peru
    Tunisia
    Ghana
    Mongolia
    Senegal
    Uganda
    OTHER COUNTRIES
  • Learning
    • Training
      • Residential training courses
        • Executive
        • Anglophone Africa
        • Francophone Africa
      • Online training courses
        • Advanced
        • Negotiating Contracts
        • Massive open online course (MOOC)
        • Interactive course: Petronia
      • Trainers' modules
        • (empty)
    • Primers
    • Glossary
  • Analysis & Tools
    • Publications
    • Tools
    • Economic models
  • About Us
    • What we do
      • 2020-2025 Strategy
      • Country prioritization
    • NRGI impact
    • Board of Directors
    • Emeritus Board Members
    • Advisory Council
    • Leadership team
    • Experts and staff
    • Careers and opportunities
    • Grant-making
    • Financials
    • Privacy policy
    • Contact us
  • News
  • Events
  • Blog

You are here

  1. Home
  2. Blog

In Indonesia, Where Rule-Making is Diffuse, a Better Method of Training Regulators

22 May 2019
Download
Pushing for Regulatory Reforms in Indonesia (PDF 3.02 MB)
Author
Fikri Zaki Muhammadi
Topics
Legislation and regulation
Countries
IndonesiaMalaysia
Stakeholders
Civil society actorsGovernment officialsJournalists and mediaParliaments and political parties
Precepts
P1 What are Natural Resource Charter precepts?
Social Sharing

Complex, overlapping, multitudinous and sometimes contradictory sets of regulations have created uncertainty and discouraged investment in Indonesia, according to a key ministry.

Current President Joko “Jokowi” Widodo is pushing for “deregulation” and “re-regulation” in all sectors. A training module two years in the making for those directly involved in regulation from Indonesia’s ministry in charge of national development, known as Bappenas, and the Natural Resource Governance Institute might aid the effort.

Bappenas data shows the government issued nearly 12,500 regulations between 2000 and 2015. More than 8,300 of them were ministerial-level regulations, around 2,400 were government regulations and 916 were laws passed by the House of Representatives. More than 25,000 regency or city level regulations were issued during the same period.

A dissertation by Jember University’s Bayu Anggono found that at least 14 of 428 laws enacted between 1999 and 2012 fell short of principles for issuing legislative regulations laid out in a 2011 law. These principles state that regulations must have clear objectives, be proposed by a legitimate institution and be implementable.

Substantive regulatory weakness is indicated in the 2018 Worldwide Governance Indicators, where Indonesia ranked in the 51.92 percentile (100 being the best) in terms of regulatory quality, sixth in Southeast Asia. Singapore, Brunei and Malaysia were the top three regional performers, with scores of 99.52, 75.48 and 74.52, respectively.

In the oil, gas and mining sectors, investors have seen many cases of inconsistency between what is said by the central government—the authority for issuing permits—and the subnational government, the most visible source of power where companies work. There are also long delays in registering mining businesses. Many government officials concurred with this assessment.

The World Bank’s 2019 Doing Business report ranks Indonesia 73rd out of 212 countries for ease of doing business. Uncertainty in terms of starting a business, dealing with construction permits and contract enforcement could serve as deterrent for inflow of capital.

Among many factors, regulatory capacity plays a role in this shortcoming. Therefore, the module, a “living document,” will be used at the national and subnational governments as part of bureaucrats’ education and training programs. It will bolster previous modules that have been trying to translate the 2011 law.

This module puts special emphasis on engaging adult learning methods. Interactive programs like storytelling (to trigger active participation), fun games and icebreakers (to prevent boredom) are important parts of this module. Bureaucrats are also tested immediately after they receive lessons so that the knowledge they receive is sharpened.

Lessons start with pre-tests on the difference and correlation between policy and regulation. Questions such as, “Is policy more important than regulation?” and “Are the central and regional governments issuing too many regulations?” bring the participants back to the basics of policy-making and regulation.

The module trains on cost and benefit analysis, which no other modules have done. Course participants learn about the pros and cons of having or not having a regulation published and avoid the urge to produce a legislative product when there is unnecessary demand for it.

In the fourth quarter of 2018, the Communications and Information Ministry became the first user of this module. The Energy and Mineral Resources Ministry is set to begin training in the second quarter. This will be a big step toward pushing bureaucratic reforms in the extractive sector, especially with regard to doing business.

Upon completing the module, participants’ capacity to formulate effective and efficient regulations are expected to improve. They will also be able to harmonize the existing regulations that overlap with and contradict each other. Further, a change of mindset in the rule-making process will take place, preventing the same problem from happening again in the future.

There needs to be a concerted effort involving a large number of people and close coordination between ministries and agencies to see the fruits of these efforts. In addition to that, the new government must continue this effort as it brings about the changes that the country needs. The module’s release is an important step to that. Kudos to Bappenas.

Fikri Zaki Muhammadi is an Asia-Pacific associate with the Natural Resource Governance Institute (NRGI).

Related content

An All-Powerful Pertamina is Not the Key to Success in Indonesia

Patrick Heller
21 October 2016

Countries Struggling with Governance Manage $1.2 Trillion in Resource Wealth

David MihalyiAnna Fleming
8 September 2017

Natural Resource Federalism: Considerations for Myanmar

23 January 2018
Sebastian SahlaAndrew BauerNatalie Kirk

Asia-Pacific Regional Knowledge Hub Course

Event type: 
Training
Monday, January 9, 2017 - 09:00 to Saturday, January 21, 2017 - 17:00
Yogyakarta, Indonesia

State-Owned, Still Struggling: Our New Research on National Oil Companies

Patrick Heller
14 July 2014
Helping people to realize the benefits of their countries’ endowments of oil, gas and minerals.
Follow on Facebook Follow on Twitter Subscribe to Updates
  • Topics
    Beneficial ownership
    Civic space
    Commodity prices
    Contract transparency and monitoring
    Coronavirus
    Corruption
    Economic diversification
    Energy transition
    Gender
    Global initiatives
    Legislation and regulation
    Licensing and negotiation
    Mandatory payment disclosure
    Measurement of environmental and social impacts
    Measurement of governance
    Open data
    Revenue management
    Revenue sharing
    Sovereign wealth funds
    State-owned enterprises
    Subnational governance
    Tax policy and revenue collection
  • Approach
    • Stakeholders
    • Natural Resource Charter
    • Regional knowledge hubs
  • Priority
    Countries
    • Colombia
    • Dem. Rep. of Congo
    • Ghana
    • Guinea
    • Mexico
    • Mongolia
    • Nigeria
    • Peru
    • Senegal
    • Tanzania
    • Tunisia
    • Uganda
  • Learning
    • Training
    • Primers
  • Analysis & Tools
    • Publications
    • Tools
    • Economic models
  • About Us
    • What we do
    • NRGI impact
    • Board of Directors
    • Emeritus Board Members
    • Advisory Council
    • Leadership team
    • Experts and staff
    • Careers and opportunities
    • Grant-making
    • Financials
    • Privacy policy
    • Contact us
  • News
  • Blog
  • Events
  • Search